Indian capital market watchdog Securities and Exchange Board of India (SEBI) on Thursday announced a slew of key decisions on defaulters, REITs, markets, and rating agencies. To begin with, the SEBI has ushered in the convergence of securities and commodities trading on a single exchange and cleared the listing of security receipts issued by a securitisation and reconstruction company. Here are all key decision by the SEBI in a nutshell:
1. The era of convergence: The SEBI has said all stock and commodity exchanges can facilitate trading in stocks and commodities derivatives from October 2018.
2. Cross-holding cap: The SEBI proposed a 10% cap on cross-shareholding in mutual funds was to avoid conflict of interest. The regulator has decided that any shareholder owning at least 10% stake in an asset management company (AMC) will not be allowed to have 10% or more stake in another mutual fund house. The cross-holding cap is applicable for rating agencies as well. The moves are likely to have an impact on global rating agencies like S&P, Moody’s and Fitch which have significant holdings in domestic agencies besides their direct presence.
3. Settlement notices: To fast-track cases, the SEBI will issue settlement notice to entities undergoing probe against violations like delay in making shareholding disclosures and filing of returns and reports.
4. Loan default disclosure decision deferred: The regulator deferred decisions on making debt defaults by companies public and the Kotak committee recommendations, both of which it felt required deeper consideration. “I must say that the August 2017 default disclosure circular was issued of our own volition. As a concept, it is good, in terms of implementation issues it was discussed at length but it requires further discussions so it has been deferred by the board,” said Sebi chairman Ajay Tyagi.
5. Whatsapp leak investigation: The SEBI said it is investigating the possible leaks of company earnings in social media chatrooms. There were at least 12 cases of prescient messages about major Indian companies being posted in WhatsApp groups limited to traders. “More companies are under the scanner for the leakage of unpublished financial data,” the SEBI said.
6. Higher net worth: The minimum net worth threshold for the rating agencies has been proposed to be raised to Rs 25 crore from the current level of Rs 5 crore. The move would check the menace of ‘rating shopping’ and ‘pick-and-choose’ approach in their actions. Besides, the promoter of a CRA would have to maintain a minimum shareholding of 26% in the CRA for a period of three years from the date of registration.